The G-Man, the Shrimp Scam and Sacramento's Big Sting : FBI AGENT JAMES WEDICK'S UNDERCOVER OPERATION NETTED 14 PUBLIC OFFICIALS. BUT HAS IT CHANGED THE WAY THE STATE LEGISLATURE WORKS?

December 11, 1994|Mark Gladstone and Paul Jacobs | Times reporters Mark Gladstone and Paul Jacobs cover government and politics from the Sacramento bureau

Levin, who had done some lobbying, told Wedick of conversations with an Assembly aide who claimed that legislation could be bought for a price in the state Capitol. Levin, who had been a whistle-blower while working for the U.S. Department of Agriculture in Washington, had a sharpened sense of outrage at a state government that he regarded as corrupt. Wedick says Levin's news didn't surprise him. An FBI probe in the late '70s of the Capitol had ended without any convictions. But Wedick realized that if he could persuade Levin to wear a hidden recording device--a wire--then he might be able to get the proof he needed to launch an investigation that would nail corrupt politicians.

For three years, while Wedick worked on a series of high-profile white-collar cases, he ruminated about ways to infiltrate the Legislature, sometimes talking it over with Brennan, now assigned to Mobile, Ala. While driving by a Sacramento fish market specializing in shrimp, the pair concocted the idea of setting up a bogus business that would import gourmet shrimp from the Gulf of Mexico to a growing market in Northern California. The home office would be established in Mobile. The company would need a special-interest measure to help it qualify for a loan guaranteed by the state. Undercover operatives would then approach lawmakers and their aides for help in moving their bill through the system. If the officials were corrupt--if payoffs were necessary--the FBI would write the checks. All conversations and transactions would be taped--the kind of evidence that juries could not ignore.

Officials at FBI headquarters were intrigued by the scheme, but initially turned it down. The federal government had never authorized an operation that pushed phony legislation as a way to catch crooked state lawmakers; there was also concern that the investigation would be an unwarranted intervention by the federal government into state politics. Still, Wedick persisted, arguing that an undercover operation was the only way to penetrate a political system that has its own code of silence. "From Day One, the bureau was leery about getting involved with a state Legislature in this kind of intrusive way," Wedick says.

In October, 1985, with the help of two assistant U.S. attorneys, David F. Levi and George L. O'Connell, Wedick got the go-ahead from the Justice Department for the investigation, which included $100,000 for bribes. The project was code-named Brispec, for bribery-special interest, but later, when it became public, the press dubbed it "shrimpscam."

So concerned was FBI headquarters over the sting that it gave Wedick and the prosecutors only six months to show that they could deliver. During the next three years, "(t)here were several times that tempers exploded and we really thought at several junctures that the thing was just going to blow up," says former Assistant U.S. Atty. John P. Panneton, who prosecuted the first of the Brispec cases. "Wedick and his crew would basically have to justify continuing the operation and (the Department of Justice) didn't want to pay any more money."

Wedick spent months setting up the bogus business, fussing over every detail. There were corporate papers to draw up, a checking account to open, stationery to print and phony correspondence to generate. Brennan would become John E. Gordon, president of Gulf Shrimp Fisheries, Inc. on Airport Boulevard in Mobile, and the secretary-treasurer of the corporation would be Gordon's invented brother, James J. Gordon--none other than James J. Wedick.

As the probe moved fitfully, Wedick relied on his friend Marv Levin. Overweight and with a history of heart problems, Levin doesn't look like a spy. In fact, he is something of a klutz--he once failed to change the batteries on his FBI-issued pager because he didn't want to waste the government's money.

Tapping into his experience as a lobbyist, Levin helped Wedick craft the bill so that it was customized for one company only--Gulf Shrimp Fisheries. To qualify for a low-interest loan, according to the proposal, a company had to "import to the State of California low-fat, high-protein foodstuffs that are not native to the coast and State of California." Only such businesses in the counties of Sacramento or Yolo--where Gulf Shrimp had its local office--need apply.

The legislative aides who helped maneuver the measure around procedural barriers were soon soliciting money for themselves and their bosses' campaigns, and agent Brennan was ready to comply. Securing the required approval from Washington on short notice, though, proved difficult. Wedick and his Sacramento boss, Terry Knowles, recall frantic attempts in August, 1986, to reach FBI Director William H. Webster for approval to make $28,000 in payoffs. Calling through the night, they were finally able to persuade an assistant director to authorize the payment, just hours before the 8 a.m. meeting.